US accuses BNP Paribas of breaking sanctions on Sudan, Iran and Syria between 2002-2009. S&P says a potential settlement is why it issued the downgrade warning. Photograph: Loic Venance/AFP/Getty Images

France's biggest bank, BNP Paribas, has been threatened with a downgrade to its credit rating as it braces for a potential $10bn (£6bn) fine from US regulators for busting sanctions.

The warning by the Standard & Poor's agency came amid fresh estimates of the regulatory costs facing the European banking industry, which could leave a $104bn bill for a catalogue of errors ranging from tax evasion and mis-sold financial products to manipulation of financial markets.

Analysts at Credit Suisse doubled their estimates for the costs of the scandals which have gripped the industry since the financial crisis. Upping their estimate to $104bn from $58bn, the Credit Suisse analysts forecast that litigation facing Royal Bank of Scotland could further delay the government selling off its 83% stake.

US authorities accuse BNP Parisbas of breaking sanctions on Sudan, Iran and Syria over a seven-year period to 2009. S&P said that the potential settlement with the US had forced it to consider a potential downgrade to BNP's A plus rating and place the bank on "credit watch negative", until the outcome of the discussions with the US authorities is known.

The situation facing BNP is causing concern in France where it has emerged that president François Hollande had written to Barack Obama in April to complain the fine would be disproportionate. The pair are due to meet in Paris over dinner where Hollande will raise the situation in person with the US president, according to the Reuters news agency.

The boss of BNP, Baudouin Prot, had been expected to attend a key conference in London organised by the trade body Institute of International Finance but he did not attend the discussion on the future of finance.

George Osborne told the conference that he was preparing to clean up foreign exchange markets in the wake of allegations of rate rigging, amid reports that he will announce a crackdown in a setpiece speech at Mansion House next week.

The chancellor told the IIF conference: "What I have got to make sure is that whatever happens as a result of those investigations, we are … bolstering the integrity of the London markets."

In another session, Antony Jenkins, the chief executive of Barclays, told the audience of finance professionals that there was more to be done on reforming culture and bankers' pay.

Speaking in the Methodist central hall in Westminster, Jenkins – who has been dubbed St Antony in some circles for his attempts to clean up the bank in the wake of the Libor rigging scandal – said there were commercial reasons for improving a bank's culture.

"There's ethical reasons and productive and business reasons … this isn't about running for a sainthood, this about sound commercial principles," he said.

He has focused the bank on five key principles – respect, integrity, service, excellence and stewardship – since taking the helm in September 2012, and is sending 2,000 top managers on two-year training.

He said the "market should correct over time" as investors demanded better returns.

Barclays has still faced criticism over its pay policies and was also fined last month of systems lapses which allowed a trader to manipulate the gold market on the same day the Libor fine was announced in June 2012.

Manipulation of other markets is also being investigated by regulators, including foreign exchange and which the Chancellor intends to impose more regulation on.

The outspoken investor Davide Serra, who runs Algebris Investments, told delegates that he wondered why more bankers were not in jail as a result of the regulation clamp down.

According to the Credit Suisse analysis the $1O4bn estimate is just over half the $201bn of losses incurred during the subprime crisis which crippled European banks and some $39bn of provisions are yet to be taken by the industry.